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LONG TERM GOALS

FINANCIAL MARKET MANAGEMENT

VANSHIKA SARAOGI
XII C
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WHAT IS INVESTMENT ?
• Investment is using money to purchase assets in the
hope that the asset will generate income or appreciate
over time. Investment also helps grow the economy
because it creates economic activity, such as the buying
and selling of goods and services and employing
people. Employed people get paid and either save,
invest or spend their money. If they spend their money,
businesses make more profits. Businesses can then,
reinvest the profits in further business activities that
expand the economy.
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RULES FORtitle style
INVESTING

INVEST FOR LONG INVEST FOR INVEST EARLY

TERM REGULARLY

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WHAT ARE LONG TERM GOALS ?
• Long-term goals are usually achieved in five or more years. This type of
goal requires a methodical saving and investing plan. Long-term goals can
include saving for retirement, paying off a mortgage, or becoming debt
free. For a long-term financial goal like retirement, a person is saving over
the course of their career. The general rule of thumb is to invest
aggressively when they’re young and many years from retirement and
gradually reduce the risk as they near retirement. When saving for the
long-term, it’s also important to keep costs in mind. The lower the
investment fees, the more of the return a person keeps.
Lowering investment costs by just 1% could mean having tens of
thousands more in their portfolio by the time they retire. Time plays a
pivotal role in financial decisions. The more time one has, generally, the
more risk they can take.
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CASE-1
MR. ASHTON IRWIN
26 YEARS

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MR . ASHTON IRWIN
• Mr. Ashton Irwin is a 26 year old computer engineer working in Microsoft as
Principal Software Engineer. He earns Rs.1,950,000 per annum out of which he
invests approximately Rs.30,000 in the stock market, in a variety of instruments.
His main objective for investing is to build his own house in the future. He has a
high risk appetite and is comfortable with investing in high risk long term
instruments. This is because he doesn’t need the money right now and thus, is
able to take high risks and can support losses. Equity mutual funds, Unit-linked
insurance plans and real estate are the major investment areas for Mr. Irwin.
Also, he has a limited portfolio.

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ANALYSIS INVESTOR
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• Earns Rs.1,950,000 per annum.
• Invests Rs.30,000 per month.
• Invests in long term instruments
with high returns.
• Equity mutual funds, Unit-linked
insurance plans and real estates
are included in the portfolio of the
investor.
• Has a high risk appetite.
ADVICE
• As a young investor who has a long period of time before
retirement, you should focus on long term instruments
with high rates of return. The younger you are, the more
is your risk taking ability. Invest in equities/ mutual funds
as they usually give good returns that are better than
other asset classes. Understanding and try to mitigate
inflation is also a very important factor while investing for
long term. One should not assume job security forever as
we can’t foresee the future. Thus, it’s also necessary to
keep this factor in mind while investing. If you can
understand compounding, it can do wonders for your
investment plans. But, it can also be the downfall on you.
Having a diversified portfolio is the most important thing
as it helps to mitigate the risks. Cut off unnecessary
expenses and use that money to look for growth oriented
investment opportunities that can help in the betterment
of your future.
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CASE-2
M R . J A K E P E R A LTA
38 YEARS

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MR . JAKE PERALTA
• Mr. Jake Peralta is a 38 year old corporate lawyer who has his own law firm. He
is married and has two children. He earns approximately Rs.1,550,000 per
annum out of which he invests approximately Rs.25,800 in the stock market, in
a variety of instruments. His main objective for investing is to provide for his
children’s future. Retirement and life after it is also a reason. He has a moderate
risk appetite which is slightly on a higher side and invests in high risk and
moderate risk medium term instruments with high returns. Blue chip mutual
funds, Mid cap stocks and Real estate investment trust funds are the major
investment areas for Mr. Peralta. He also has a very diversified portfolio.

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ANALYSIS INVESTOR
Click to edit Master title style ADVICE
• Earns Rs.1,550,000 per annum.
• Invests Rs.25,800 per month.
• Invests in medium term
instruments with high returns.
• Blue chip mutual funds, Mid cap
stocks and Real estate investment
trust funds are included in the
portfolio of the investor.
• Has a moderate risk appetite that
is on the higher side.
• A person in his late 30’s has some period of time before
retirement, thus, they can worry less about market
volatility. They should focus on long term and medium
instruments with high rates of return. For most people,
their goals should be taking care of their immediate
needs, saving for the future, ensuring that they’re able to
take care of their family and planning for big events. You
need to be financially organized and know where all of
your money is. Invest in stocks, mutual funds, bonds, etc.
as they usually give good returns and are suitable for
investors with moderate risk. Although, there is some
time before you start to think about retirement, it is
necessary to keep this factor in mind while investing
currently. Having a diversified portfolio of low cost ETF’s
is also important as it helps to mitigate the risks.
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CASE-3
MR. LUKE HEMMINGS
52 YEARS

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MR . LUKE HEMMINGS
• Mr. Luke Hemmings is a 52 year old owner of his restaurant. He earns
approximately Rs.2,350,000 per annum out of which he invests approximately
Rs.45,000 in the stock market, in a variety of instruments. Providing for his wife
and himself after retirement is the reason he invests in financial instruments. He
has a moderate risk appetite that is on the lower side and invests in low and
moderate risk medium/short term instruments with high returns. Mutual funds,
Senior Citizens’ Savings Scheme, Fixed deposits and Tax Free Bonds are the
major investment areas for Mr. Hemmings. He also has a very diversified
portfolio.

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ANALYSIS INVESTOR
Click to edit Master title style ADVICE
• Earns Rs.2,350,000 per annum.
• Invests Rs.45,000 per month.
• Invests in medium/short term
instruments with high returns.
• Mutual funds, Senior Citizens’
Savings Scheme, Fixed deposits
and Tax Free Bonds are included
in the portfolio of the investor.
• Has a moderate risk appetite that
is on the lower side.
• A person in his 50’s has to start thinking about post
retirement life and can’t invest very aggressively. Older
people require an investment option which enables them
to enjoy the luxuries of a retired life. Most post-retirement
investment options are not lucrative enough even if they
give high stability. Thus, they need to keep a balance of
low to medium risk and stable options to earn enough
and also safeguard the capital. Senior citizens get
benefits while investing like higher interest rate for FD’s,
Tax benefits and many more. Asset allocation in the
portfolio should be reassessed and the risky assets
should be replaced with safer options. It is also very
important that a person doesn’t any new loans at this
stage of life as it adds unnecessary burden to the
finances. Also, it would take away a huge portion of your
investments. Moreover one should invest only in
business they understand and avoid high-volatility stocks
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COMPARING THE
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style CASES
• Investment is necessary for people RISK INVESTMENT
CASE INCOME INVESTMENT
of all ages regardless of profession. APPETITE AVENUES

EQUITY MUTUAL
• With increase in age, people start FUNNDS, REAL
investing less aggressively. 1. 1,950,000 30,000 HIGH ESTATE, UNIT-
LINKED
INSURANCE PLANS
• The market volatility also decreases
BLUE CHIP
with increase in age. MUTUAL FUNDS,
MODERATELY
2. 1,550,000 25,800 MID CAP STOCKS,
HIGH
• Mutual Funds are very popular REAL ESTATE
TRUST FUNDS
among people of all ages and they
MUTUAL FUNDS,
suit the needs of every individual. SENIOR CITIZENS’
SAVINGS SCHEME,
3. 2,350,000 45,000 MODERATELY LOW
• The risk appetite of an investor FIXED DEPOSITS
AND TAX FREE
primarily depends on their age. BONDS

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“
“Wealth isn’t primarily determined by
investment performance, but
by investor behavior.”
- NICK MURRAY

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ACKNOWLEDGEMENT
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I would like to express my special thanks of gratitude to my

teacher Mrs A. Sanyal as well as our principal, Mrs. Anjana
Saha who gave me the golden opportunity to do this
wonderful project which also helped me in doing a lot of
Research and I have came to know about so many new
things. I am really thankful to them.

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THANK YOU

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